BERKSHIRE HATHAWAY INC.

CONSOLIDATED FINANCIAL STATEMENTS


    

BERKSHIRE HATHAWAY INC. and Subsidiaries CONSOLIDATED BALANCE SHEETS (dollars in millions except per share amounts)

December 31, ---------------------- 1996 1995* ASSETS ---------- ---------- Cash and cash equivalents..............................$ 1,339.8 $ 2,703.8 Investments: Securities with fixed maturities..................... 6,446.9 1,423.2 Equity securities.................................... 27,750.6 21,017.6 Receivables............................................ 1,523.2 718.9 Inventories............................................ 619.6 601.1 Assets of finance businesses........................... 968.9 756.7 Property, plant and equipment.......................... 1,034.2 333.3 Goodwill of acquired businesses........................ 3,110.3 672.0 Other assets........................................... 616.0 484.8 ---------- ---------- $43,409.5 $28,711.4 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Losses and loss adjustment expenses....................$ 6,274.4 $ 3,698.6 Unearned premiums...................................... 1,183.5 374.1 Accounts payable, accruals and other liabilities....... 2,556.8 1,039.1 Income taxes, principally deferred..................... 6,837.6 4,849.5 Borrowings under investment agreements and other debt.. 1,944.4 1,061.7 Liabilities of finance businesses...................... 851.4 685.2 ---------- ---------- 19,648.1 11,708.2 ---------- ---------- Minority shareholders' interests....................... 335.1 264.5 ---------- ---------- Shareholders' equity: Common Stock: ** Class A Common Stock, $5 par value, 1,376,188 and 1,381,308 shares issued; 1,206,120 and 1,193,512 shares outstanding................... 6.9 6.9 Class B Common Stock, $0.1667 par value, 783,755 shares issued and outstanding in 1996.......... 0.1 -- Capital in excess of par value....................... 2,274.1 1,001.7 Unrealized appreciation of investments, net.......... 12,143.9 9,220.7 Retained earnings.................................... 9,032.7 6,544.1 ---------- ---------- 23,457.7 16,773.4 Less: Cost of 170,068 and 187,796 Class A common shares in treasury............................... 31.4 34.7 ---------- ---------- Total shareholders' equity................. 23,426.3 16,738.7 ---------- ---------- $43,409.5 $28,711.4 ========== ========== * Restated - See Notes to Consolidated Financial Statements. ** Class B Common Stock has economic rights equal to one-thirtieth (1/30) of the economic rights of Class A Common Stock. Accordingly, on an equivalent Class A Common Stock basis, there are 1,232,245 shares outstanding at December 31, 1996 versus 1,193,512 outstanding at December 31, 1995.

See accompanying Notes to Consolidated Financial Statements


BERKSHIRE HATHAWAY INC. and Subsidiaries CONSOLIDATED STATEMENTS OF EARNINGS (dollars in millions except per share amounts)

Year Ended December 31, 1996 1995 * 1994 * -------- -------- -------- Revenues: Insurance premiums earned.........................$4,117.8 $ 957.5 $ 923.2 Sales and service revenues........................ 3,061.2 2,755.9 2,351.9 Interest, dividend and other investment income.... 811.9 629.2 519.0 Income from finance businesses.................... 25.3 26.6 24.9 Realized investment gain.......................... 2,484.1 194.1 91.3 -------- -------- -------- 10,500.3 4,563.3 3,910.3 -------- -------- -------- Cost and expenses: Insurance losses and loss adjustment expenses..... 3,089.5 612.0 565.3 Insurance underwriting expenses................... 797.6 325.0 228.0 Cost of products and services sold................ 1,884.0 1,706.7 1,450.0 Selling, general and administrative expenses...... 861.9 759.6 599.6 Goodwill amortization............................. 61.7 16.3 13.8 Interest expense.................................. 99.7 59.3 60.1 Other-than-temporary decline in value of investment in USAir Group, Inc. Preferred Stock.. -- -- 268.5 -------- -------- -------- 6,794.4 3,478.9 3,185.3 -------- -------- -------- Earnings before income taxes and minority interest. 3,705.9 1,084.4 725.0 Income taxes...................................... 1,196.8 276.2 163.3 Minority interest................................. 20.5 13.3 8.7 -------- -------- -------- Net earnings.......................................$2,488.6 $ 794.9 $ 553.0 ======== ======== ======== Average shares outstanding **....................1,205,257 1,187,102 1,177,750 Net earnings per share ** ........................ $2,065 $670 $470 ====== ==== ==== * Restated - See Notes to Consolidated Financial Statements. ** Average shares outstanding for 1996 include average Class A Common shares and average Class B Common shares determined on an equivalent Class A Common Stock basis. Net earnings per share shown above represents net earnings per Class A Common share. Net earnings per Class B Common share is equal to one-thirtieth (1/30) of such amount or $69 per share for 1996.

See accompanying Notes to Consolidated Financial Statements


BERKSHIRE HATHAWAY INC. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in millions)

Year Ended December 31, 1996 1995 1994 --------- --------- --------- Cash flows from operating activities: Net income.............................................. $ 2,488.6 $ 794.9 $ 553.0 Adjustments to reconcile net income to cash flows from operating activities: Realized investment gain.............................. (2,484.1) (194.1) (91.3) Other-than-temporary decline in value of investment in USAir Group, Inc. Preferred Stock............. -- -- 268.5 Depreciation and amortization......................... 151.6 75.7 62.5 Changes in assets and liabilities before effects from business acquisitions: Losses and loss adjustment expenses................. 352.1 268.6 274.1 Deferred charges re reinsurance assumed............. 51.8 51.0 25.3 Unearned premiums................................... (8.8) 66.9 (8.5) Receivables......................................... (127.1) (35.4) (49.8) Accounts payable, accruals and other liabilities.... 558.3 228.2 210.5 Income taxes........................................ 221.9 (29.9) (252.4) Other................................................. 55.7 (98.0) (62.8) Net cash flows from operating activities.......... 1,260.0 1,127.9 929.1 ---------- --------- --------- Cash flows from investing activities: Purchases of securities with fixed maturities........... (2,464.7) (273.9) (2,485.8) Purchases of equity securities.......................... (1,423.4) (1,459.9) (3,050.0) Proceeds from sales of securities with fixed maturities. 277.5 669.7 1,772.1 Proceeds from redemptions and maturities of securities with fixed maturities................................. 791.9 954.6 85.9 Proceeds from sales of equity securities................ 1,531.0 1,352.7 1,466.8 Loans and investments originated in finance businesses.. (577.1) (381.2) (246.8) Principal collection on loans and investments originated in finance businesses...................... 351.5 363.0 332.4 Acquisitions of businesses, net of cash acquired........ (1,975.3) -- -- Other................................................... (19.2) (11.4) (23.2) Net cash flows from investing activities.......... (3,507.8) 1,213.6 (2,148.6) ---------- --------- --------- Cash flows from financing activities: Proceeds from borrowings of finance businesses.......... 285.1 265.7 208.6 Proceeds from other borrowings.......................... 1,604.3 1,232.7 1,225.3 Repayments of borrowings of finance businesses.......... (427.3) (232.1) (390.5) Repayments of other borrowings.......................... (1,170.0) (1,151.7) (1,387.7) Net proceeds from issuance of Class B Common Stock...... 565.0 -- -- Other................................................... (3.5) (1.5) (0.9) ---------- --------- --------- Net cash flows from financing activities.......... 853.6 113.1 (345.2) ---------- --------- --------- Increase (decrease) in cash and cash equivalents.. (1,394.2) 2,454.6 (1,564.7) Cash and cash equivalents at beginning of year........... 2,744.5 289.9 1,854.6 ---------- --------- --------- Cash and cash equivalents at end of year *............... $1,350.3 $2,744.5 $ 289.9 ========== ========= ========= * Cash and cash equivalents at end of year are comprised of the following: Finance businesses...............................$ 10.5 $ 40.7 $ 16.0 Other............................................ 1,339.8 2,703.8 273.9 ---------- --------- --------- $1,350.3 $ 2,744.5 $ 289.9 ========== ========= =========

See accompanying Notes to Consolidated Financial Statements


BERKSHIRE HATHAWAY INC. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1996

  
(1) Significant accounting policies and practices  
    (a) Nature of operations and basis of consolidation   
	   Berkshire  Hathaway Inc. ("Berkshire" or "Company") is a holding   
             company owning subsidiaries engaged in a number of diverse  
             business activities. The most important of these is the  
             property and casualty insurance business conducted on both a  
             direct and reinsurance basis. Further information regarding this  
             business and Berkshire's other reportable business segments is   
             contained in Note 15.  
  
           The accompanying Consolidated Financial Statements include the   
             accounts of Berkshire consolidated with accounts  
             of all its subsidiaries. Intercompany accounts and transactions   
             have been eliminated. The accompanying prior year financial   
             statements have been restated from the amounts previously   
             reported in the Company's Consolidated Financial Statements   
             included in its Annual Report for the year ended December 31,   
             1995. See 1(b) below for further information.  
  
    (b) Restatement  
           As more fully discussed in Note 2, on January 2, 1996, GEICO   
             Corporation ("GEICO") became a wholly-owned  
             subsidiary of Berkshire. Prior to January 2, 1996, Berkshire   
             owned approximately 51% of the outstanding common stock of   
             GEICO. Previously the investment in GEICO common stock had been   
             classified as an available-for-sale security and was carried in   
             Berkshire's Consolidated Balance Sheet at fair value.  
  
           Generally accepted accounting principles require that prior year   
             financial statements be restated when control of  
             a business is obtained on a "step-by-step" basis. Accordingly,   
             the accompanying Consolidated Financial Statements for 1995 and   
             1994 have been restated to account for Berkshire's previous   
             investment in GEICO common stock under the equity method.   
             Berkshire's proportionate share of GEICO's net income reduced   
             by amortization of related goodwill is included in the   
             Consolidated Statements of Earnings as a component of interest,   
             dividends and other investment income. The principal effect of   
             the restatement was to decrease shareholders' equity as of   
             December 31, 1995, by $478.4 million from the amount reported   
             in Berkshire's Consolidated Financial Statements included in   
             its Annual Report for the year ended December 31, 1995.  
  
    (c) Use of estimates in preparation of financial statements  
           The preparation of the consolidated financial  statements in   
             conformity with generally  accepted  accounting principles requires   
             management to make estimates and assumptions that affect the reported   
             amount of assets and liabilities at the date of the financial statements   
             and the reported amount of revenues and expenses during the period.   
             Actual results may differ from the estimates and assumptions used in   
             preparing the consolidated financial statements.  
  
    (d) Cash equivalents  
           Cash equivalents consist of funds invested in money market   
             accounts and in investments with a maturity of three months or   
             less when purchased.  
  
    (e) Investments  
           Management determines the appropriate classifications of   
             investments in securities with fixed maturities and equity   
             securities at the time of purchase and reevaluates such   
             designations as of each balance sheet date. Investments in   
             securities with fixed maturities, except for such securities held   
             by finance businesses, are classified as available-for-sale.   
             Securities with fixed maturities held by finance businesses are   
             classified as held-to-maturity. Investments in equity securities   
             are classified as available-for-sale. Securities with fixed   
             maturities are deemed to be held-to-maturity securities when the   
             Company has the ability and positive intent to hold them to   
             maturity.  
  
           Held-to-maturity securities are carried at amortized cost.   
             Available-for-sale securities are stated at fair value, with 	  
             unrealized gains and losses, net of tax, reported in a   
             separate component of shareholders' equity. Realized gains and   
             losses, which arise when investments are sold (as determined on   
             a specific identification basis), other-than-temporarily   
             impaired or in certain situations when investments are marked-  
             to-market, are included in the Consolidated Statements of   
             Earnings.  
  
    (f) Goodwill of acquired businesses  
           Goodwill of acquired businesses represents the difference between   
             purchase cost and the fair value of the net  
             assets of acquired businesses and is being amortized on a   
             straight line basis over forty years. The Company continually   
             reviews the recoverability of the carrying value of goodwill of   
             acquired businesses using the methodology prescribed by   
             Statement of Financial Accounting Standards No. 121 "Accounting   
             for the impairment of Long-Lived Assets and for Long-Lived   
             Assets to be Disposed Of."  
  
    (g) Insurance premium acquisition costs  
           For financial reporting purposes, certain costs of acquiring   
             insurance premiums are deferred, subjectto ultimate   
             recoverability, and charged to income as the premiums are earned.   
             Generally, the ultimate recoverability of premium acquisition   
             costs is determined without regard to investment income. The   
             unamortized balance of deferred premium acquisition costs is   
             included in other assets.  
  
    (h) Deferred charges re reinsurance assumed  
           The excess of estimated liabilities for claims and claim costs   
             ultimately payable by the Insurance Groupover consideration received with   
             respect to retroactive property/casualty reinsurance contracts that   
             provide for indemnification of insurance risk, other than structured   
             settlements, is established as a deferred charge at inception of such   
             contracts. The deferred charges are subsequently amortized using the   
             interest method over the expected settlement periods of the claim   
             liabilities. The unamortized balance is included in other assets and was   
             $337.9 million at December 31, 1996 and $389.7 million at December 31,   
             1995.  
  
    (j) Losses and loss adjustment expenses  
           Liability for unpaid losses and loss adjustment expenses   
             represents the aggregate of such obligations ofmembers of the Insurance   
             Group with respect to: (i) prospective property/casualty insurance and   
             reinsurance contracts, (ii) retroactive property/casualty reinsurance   
             contracts that provide for indemnification of insurance risk, other than   
             structured settlements, and (iii) reinsurance contracts providing for   
             periodic payments with respect to settled claims ("structured   
             settlements"). Except for structured settlement liabilities which are   
             stated at discounted present values, the liability for unpaid losses and   
             loss adjustment expenses is at the aggregate of estimated ultimate   
             payment amounts.  
  
           Ultimate payment amounts with respect to prospective contracts   
             are determined from (i) individual caseestimates, (ii) estimates of   
             incurred but not reported losses, based on past experience, and (iii)   
             reports of losses from ceding insurers.  
  
           Ultimate payment amounts with respect to retroactive reinsurance   
             contracts that provide forindemnification of insurance risk, other than   
             structured settlements, are established for financial reporting purposes   
             at maximum limits of indemnification under the contracts. (See also 1(h)   
             above related to deferred charges re reinsurance assumed.)  
  
           Liabilities under structured settlement contracts are established   
             when the contracts are entered into, at the then 		  
             present value of the actuarially determined ultimate payment   
             amount discounted at the prevailing market interest rate.   
             Annual accretions to the liabilities are charged to losses   
             incurred. This accounting policy also applies to annuity   
             reserves and policyholder liabilities which are included in the   
             liabilities of finance businesses.  
  
    (k) Insurance premiums  
           Insurance premiums for prospective insurance and non-property   
             catastrophe reinsurance policies are recognized  
             as revenues ratably over their terms with unearned premiums   
             computed on a monthly or daily pro rata basis. Premiums for   
             catastrophe excess of loss reinsurance coverages are deferred   
             until the earlier of a loss occurrence or policy expiration.   
             Consideration received for structured settlements is accounted   
             for as premiums earned at the inception of the contracts.   
             Premiums earned are stated net of amounts ceded to reinsurers.  
  
    (m) Reinsurance  
           Provisions for losses and loss adjustment expenses are reported   
             in the accompanying consolidated statements of 		  
             earnings after deducting estimates of amounts that will be   
             recoverable under reinsurance contracts. Such recoverables   
             totalled $47 million, $14 million, and $61 million for 1996,   
             1995 and 1994, respectively. Reinsurance contracts do not   
             relieve the Insurance Group Members of their obligations to   
             indemnify policyholders with respect to the underlying   
             insurance and reinsurance contracts. Losses and loss adjustment   
             expenses recoverable under reinsurance contracts are included   
             in receivables.  
  
(2) Business acquisitions - 1996  
    During 1996, Berkshire consummated mergers with GEICO Corporation   
("GEICO") and FlightSafety International, Inc. ("FlightSafety"). Each of   
these mergers was accounted for by the purchase method. The excess of the   
purchase cost of each business over the fair value of net assets acquired   
as of the respective merger dates is recorded as goodwill of acquired   
businesses and will subsequently be amortized over forty years. The   
aggregate amount of goodwill applicable to these acquisitions was   
approximately $2.5 billion. Additional information concerning each merger   
is provided below.  
  
    (a)  GEICO   
         On January 2, 1996, GEICO became a wholly-owned subsidiary as a   
           result of the merger of an indirect wholly-owned subsidiary  
           of Berkshire with and into GEICO. GEICO, through its  
           subsidiaries, is a multiple line property and casualty insurer,  
           the principal business of which is underwriting private  
           passenger automobile insurance.  
  
         The merger was consummated pursuant to an Agreement and Plan of   
           Merger (the "GEICO Agreement") dated August 25, 1995. Pursuant   
           to the GEICO Agreement, each issued and outstanding common share  
           of GEICO, except shares held by Berkshire subsidiaries and   
           GEICO, was converted into the right to receive $70 per share,  
           or an aggregate amount of $2.3 billion. The amount of the   
           merger consideration was based upon 33,284,733 outstanding shares   
           held by the public on the merger date.  
  
         As of the merger date, subsidiaries of Berkshire owned 34,250,000   
           common shares of GEICO, which were acquired in years prior to  
           1981 at an aggregate cost of $45.7 million. Up to the merger   
           date, neither Berkshire nor its subsidiaries had acquired any   
           shares of GEICO common stock since 1980.  However, Berkshire's  
           ownership percentage, due to intervening stock repurchases   
           by GEICO, gradually increased from about 33% in 1980 to almost   
           51% immediately prior to the merger date.  
  
    (b)  FlightSafety  
         On December 23, 1996, FlightSafety became a wholly-owned   
           subsidiary as a result of the merger of FlightSafety  
           with and into a subsidiary of Berkshire. FlightSafety provides   
           high technology training to operators of aircraft and ships   
           throughout the world.  
  
         The merger was consummated pursuant to an Agreement and Plan   
           of Merger dated October 14, 1996 (the "FlightSafety Agreement")  
           between Berkshire and FlightSafety. Pursuant to the FlightSafety   
           Agreement, aggregate consideration of approximately $1.5 billion   
           was paid to FlightSafety shareholders consisting of $769.0 million  
           in cash, 17,728 shares of Berkshire's Class A common stock and   
           112,655 shares of Berkshire's Class B common stock.  
  
     The results of operations for each of these entities are included in   
Berkshire's consolidated results of operations from the effective dates   
of each of the mergers (GEICO - January 2, 1996 and FlightSafety -   
December 23, 1996). The following table sets forth certain consolidated   
statement of earnings data for the years ended December 31, 1996 and   
1995, as if the GEICO and FlightSafety mergers had been consummated on   
the same terms at the beginning of 1995. Dollar amounts are in millions,   
except per share amounts.  
                                                        1996       1995   
                                                     ---------  ---------  
     Insurance premiums earned.......................$ 4,117.8  $ 3,744.5  
     Sales and service revenues......................  3,416.5    3,081.6  
     Total revenues.................................. 10,823.5    7,640.9  
     Net income......................................  2,515.0      833.8  
     Earnings per equivalent Class A common share....    2,051        690  
  
(3)  Business acquisitions - 1995  
     During 1995, the Company consummated mergers with Helzberg's Diamond   
Shops, Inc. ("Helzberg's") and R.C. Willey Home Furnishings ("R.C.   
Willey") by reissuing 15,762 shares of its common stock (subsequently    
redesignated Class A Common Stock) held in treasury in exchange for 100%   
of the common stock of each of these companies. Helzberg's consists of a   
chain of 181 jewelry stores operating in 28 states and R.C. Willey,   
through its seven locations, is the dominant retailer of home furnishings   
in Utah.  
  
     Each of these mergers was accounted for by the purchase method and,   
accordingly, the operating results of these businesses are included in   
the Company's consolidated results of operations from the effective dates   
of the mergers (Helzberg's - April 30, 1995; R.C. Willey - June 29,   
1995). Had the results of these businesses been included commencing with   
operations at the beginning of 1994, the reported results would not have   
been materially affected.  
  
(4)  Investments in securities with fixed maturities  
     The amortized cost and estimated fair values as of December 31, 1996   
and 1995, of investments in securities with fixed maturities are as   
follows (in millions):  
  
           December 31, 1996                                   Gross       Gross     Estimated   
                                                 Amortized   Unrealized  Unrealized     Fair      
                                                    Cost       Gains       Losses      Value     
                                                  --------    --------    --------   --------  
Bonds:  
  U.S. Treasury securities and obligations of  
    U.S. government corporations and agencies.... $2,618.8    $    4.0    $  (5.7)   $2,617.1   
  Obligations of states, municipalities  
    and political subdivisions...................  2,502.0        32.4       (1.8)    2,532.6   
  Corporate bonds................................     22.0        --         --          22.0   
Redeemable preferred stocks......................    584.3       275.9       (4.3)      855.9   
Mortgage-backed securities.......................    415.2         6.1       (2.0)      419.3   
                                                  --------    --------    --------   --------  
                                                  $6,142.3    $  318.4    $ (13.8)   $6,446.9   
                                                  ========    ========    ========   ========  
  
           December 31, 1995                                   Gross       Gross     Estimated   
                                                 Amortized   Unrealized	 Unrealized     Fair      
                                                    Cost       Gains       Losses      Value     
                                                  --------    --------    --------   --------  
Bonds:  
  U.S. Treasury securities and obligations of  
    U.S. government corporations and agencies....$    80.9    $    2.2    $   --     $   83.1     
  Obligations of states, municipalities  
    and political subdivisions...................    346.4        17.2       (0.5)      363.1     
Redeemable preferred stocks......................    682.5       153.4       (2.9)      833.0     
Mortgage-backed securities.......................    138.3         5.9       (0.2)      144.0     
                                                  --------    --------    --------   --------  
                                                 $ 1,248.1    $  178.7    $  (3.6)   $1,423.2  
                                                  ========    ========    ========   ========  
  
Amounts above exclude securities with fixed maturities held by finance businesses. See note 7.  
  
     Redeemable preferred stocks include 358,000 shares of USAir Group,   
Inc. Series A Cumulative Convertible Preferred Stock ("USAir Preferred   
Shares"). The USAir Preferred Shares were acquired in 1989 for $358   
million. If not called or converted prior to August 7, 1999, the USAir   
Preferred Shares are mandatorily redeemable by USAir Group, Inc.   
("USAir") at $1,000 per share ($358 million in the aggregate), plus   
accrued dividends.  
  
     During the five years ended December 31, 1994, USAir reported   
aggregate losses of approximately $2.4 billion. In 1994, USAir announced   
it was suspending the payment of dividends. Consequently, prior to the   
end of 1994, Berkshire management concluded that an other-than-temporary   
decline in the value of USAir Preferred shares had arisen. The 1994   
Consolidated Statement of Earnings includes a pre-tax charge of $268.5   
million to reflect the decline.  
  
     While USAir returned to profitability during 1995, it continued the   
suspension of dividends until the second half of 1996 when dividend   
payments of $47 million were received. Such amount is included in the   
1996 Consolidated Statement of Earnings under the caption "Interest,   
dividend and other investment income."  An additional dividend payment of   
$30 million was received in January, 1997 and dividends of approximately   
$17 million remain in arrears.  
  
     Berkshire management has estimated the fair value of USAir Preferred   
shares to be $322.2 million at December 31, 1996. The increase of $232.7   
million in the estimated fair value over the amount recorded at December   
31, 1994, is included as a component of the increases during 1995 and   
1996 in unrealized appreciation of investments.  
  
     Shown below are the amortized cost and estimated fair values of the   
above securities at December 31, 1996, by contractual maturity dates.   
Actual maturities will differ from contractual maturities because issuers   
of certain of the securities retain early call or prepayment rights.   
Amounts are in millions.  
                                                          Estimated   
                                               Amortized     Fair      
                                                  Cost      Value     
                                                --------  ---------  
     Due in one year or less................... $2,073.2   $2,085.0   
     Due after one year through five years.....  2,481.9    2,750.5   
     Due after five years through ten years....  1,022.8    1,039.8   
     Due after ten years.......................    149.2      152.3   
                                                --------  ---------  
                                                 5,727.1    6,027.6   
     Mortgage-backed securities................    415.2      419.3   
                                                --------  ---------  
                                                $6,142.3  $ 6,446.9   
                                                ========  =========  
  
  
(5)  Investments in equity securities  
     Aggregate data with respect to the consolidated investment in equity   
securities are shown below (in millions):  
  
    December 31, 1996              
                                                       Unrealized    Carrying    
                                               Cost       Gains     Value ***   
                                             --------   ---------   ---------  
  Common stock of:  
    American Express Company (a).............$1,392.7   $ 1,401.6   $ 2,794.3   
    The Coca-Cola Company.................... 1,298.9     9,226.1    10,525.0   
    The Walt Disney Company.................. 1,533.2       183.6     1,716.8   
    Federal Home Loan Mortgage Corporation...   449.7     1,323.1     1,772.8   
    The Gillette Company.....................   600.0     3,132.0     3,732.0   
    McDonald's Corporation................... 1,265.3       103.1     1,368.4   
    Wells Fargo & Company....................   553.9     1,413.0     1,966.9   
  All other equity securities................ 2,058.3     1,816.1*    3,874.4   
                                             --------   ---------   ---------  
                                             $9,152.0   $18,598.6   $27,750.6   
                                             ========   =========   =========  
  
    December 31, 1995  
                                                       Unrealized    Carrying    
                                               Cost       Gains     Value ***   
                                             --------   ---------   ---------  
  Common stock of:  
    American Express Company (a).............$1,392.7   $   653.6   $ 2,046.3   
    Capital Cities/ABC, Inc. (b).............   345.0     2,122.5     2,467.5   
    The Coca-Cola Company.................... 1,298.9     6,126.1     7,425.0   
    Federal Home Loan Mortgage Corporation...   260.1       783.9     1,044.0   
    GEICO Corporation (c).................... 1,175.8        --       1,175.8   
    The Gillette Company.....................   600.0     1,902.0     2,502.0   
    Wells Fargo & Company....................   423.7     1,043.2     1,466.9   
  All other equity securities................ 1,680.0     1,210.1**   2,890.1   
                                             --------   ---------   ---------  
                                             $7,176.2   $13,841.4   $21,017.6   
                                             ========   =========   =========  
  
       *  Represents gross unrealized gains $1,838.5 less gross   
           unrealized losses $22.4.  
      **  Represents gross unrealized gains $1,302.1 less gross   
           unrealized losses $92.0.  
     ***  Represents market value for all investments in equity  
           securities except for GEICO Corporation.   
           See footnote (c) which follows.  
  
  (a)  American Express Company  
       Common shares of American Express Company ("AXP") owned by   
         Berkshire and its subsidiaries possessed approximately 10.5% of the   
         voting rights of all AXP shares outstanding at December 31, 1996. The   
         shares are held subject to various agreements with certain insurance   
         and banking regulators which, among other things, prohibit Berkshire   
         from (i) seeking representation on the Board of Directors of AXP   
         (Berkshire may agree, if it so desires, at the request of management   
         or the Board of Directors of AXP to have no more than one   
         representative stand for election to the Board of Directors of AXP)   
         and (ii) acquiring or retaining shares that would cause its ownership   
         of AXP voting securities to equal or exceed 17% of the amount   
         outstanding (should Berkshire have a representative on the board of   
         directors, such amount is limited to 15%). In connection therewith,   
         Berkshire has entered into an agreement with AXP which became   
         effective when Berkshire's ownership interest in AXP voting   
         securities reached 10% and will remain effective so long as Berkshire   
         owns 5% or more of AXP's voting securities. The agreement obligates   
         Berkshire, so long as Harvey Golub is chief executive officer of AXP,   
         to vote its shares in accordance with the recommendations of AXP's   
         Board of Directors. Additionally, subject to certain exceptions,   
         Berkshire has agreed not to sell AXP common shares to any person who   
         owns 5% or more of AXP voting securities or seeks to control AXP,   
         without the consent of AXP.  
  
  (b)  Capital Cities/ABC, Inc.  
       On January 4, 1996, shareholders of Capital Cities/ABC, Inc.   
         ("Capital Cities") and The Walt Disney Company  
         ("Disney") approved an agreement and plan of merger by and   
         between Disney and Capital Cities. In March 1996, Berkshire   
         received approximately 21 million shares of Disney common stock   
         and $1.2 billion in cash in exchange for the common shares of   
         Capital Cities.  
  
  (c)  GEICO Corporation  
       The cost and carrying value of the investment in GEICO common   
         stock as of December 31, 1995 represents  
         Berkshire's cost plus its share of GEICO's undistributed   
         accumulated earnings and unrealized appreciation on   
         investments. See Notes 1(b) and 2 for additional information.  
  
(6)  Realized investment gains (losses)  
     Realized gains (losses) from sales and redemptions of investments are   
       summarized below (in millions):  
  
                                           1996        1995   	  1994     
     Equity securities -                 ---------   --------   --------  
       Gross realized gains............. $2,379.1 *  $  109.9   $  185.7    
       Gross realized losses............    (36.4)      (14.2)     (96.9)   
     Securities with fixed maturities  
         and other investments -  
       Gross realized gains.............    144.6       100.8        6.8    
       Gross realized losses............     (3.2)       (2.4)      (4.3)   
                                         --------    --------   --------  
                                         $2,484.1    $  194.1   $   91.3  
                                         ========    ========   ========  
  
     * In March 1996 Disney completed its acquisition of Capital Cities.   
       Subsidiaries of Berkshire received aggregate consideration of $2.5   
       billion, which included cash of $1.2 billion and common shares of   
       Disney with a value of $1.3 billion. Gross realized gains from sales of   
       equity securities includes a gain of $2.2 billion relating to Disney's   
       acquisition of Capital Cities.  
  
(7)  Finance businesses  
     Berkshire's finance businesses are comprised of commercial and   
consumer finance companies and an annuity business. Assets and   
liabilities of Berkshire's finance businesses are summarized below (in   
millions):  
  
                                                    Dec. 31,   Dec. 31,   
                                                      1996       1995      
                                                    --------   --------  
    Assets                                     
    Cash and cash equivalents.......................$  10.5    $  40.7     
    Installment loans and other receivables.........  215.9      185.9     
    Fixed maturity investments (a)..................  742.4      529.4     
    Other...........................................    0.1        0.7     
                                                    --------   --------  
                                                    $ 968.9    $ 756.7     
                                                    ========   ========  
  
    Liabilities  
    Borrowings under investment agreements (b)......$ 281.8    $ 403.6     
    6.75% Notes, due 2001...........................   99.5       --      
    8.125% Notes, payable in 1996...................   --        120.0     
    Annuity reserves and policyholder liabilities...  434.8      116.7     
    Other...........................................   35.3       44.9     
                                                    --------   --------  
                                                    $ 851.4    $ 685.2     
                                                    ========   ========  
  
  (a)  At December 31, 1996 and 1995, mortgage-backed securities of   
       $601.6 and $336.0 respectively were included in this caption.   
       Estimated fair values and gross unrealized gains and losses as of   
       December 31, 1996 and 1995, are as follows (in millions):  
  
                                 Gross         Gross     Estimated    
                  Amortized   Unrealized    Unrealized      Fair       
                     Cost        Gains        Losses       Value      
                  ---------   ----------    ----------   ---------  
       1996        $742.4       $ 25.2        $ (4.8)      $762.8      
       1995         529.4         29.0          (1.0)       557.4      
  
  (b)  Borrowings under investment agreements are made pursuant to   
       contracts with terms generally ranging from six months to thirty   
       years and at fixed interest rates ranging from 4% to 7%. Payments   
       of amounts outstanding at December 31, 1996, are expected to be   
       required no earlier than as follows (in millions):  
  
          1997     1998     1999     2000     2001    After 2001  
         ------   ------   ------   ------   ------   ----------  
         $211.9    $2.0     $3.3      --       --       $ 64.6   
  
        Income from finance businesses for each of the past three years is   
        summarized below (in millions):  
  
                                                1996      1995      1994      
                                              -------   -------   -------  
        Revenues  
        Interest on loans.....................$  38.8   $  38.4   $  37.4    
        Interest and dividend income..........   54.4      39.2      34.8    
        Annuity premiums earned...............  259.5      75.2      36.0    
                                              -------   -------   -------  
                                                352.7     152.8     108.2    
                                              -------   -------   -------  
        Cost and expenses  
        Interest expense......................   30.3      28.9      31.7    
        Annuity benefits and expenses.........  276.7      80.8      37.6    
        General and administrative expenses...   20.4      16.5      14.0    
                                              -------   -------   -------  
                                                327.4     126.2      83.3    
                                              -------   -------   -------  
                                              $  25.3   $  26.6   $  24.9    
                                              =======   =======   =======   
  
(8)  Unpaid losses and loss adjustment expenses  
     Supplemental data with respect to unpaid losses and loss adjustment   
expenses of property/casualty insurance subsidiaries (in millions):  
  
                                                   1996       1995      1994         
                                                 --------   --------  --------  
  Unpaid losses and loss adjustment expenses:  
   Balance at beginning of year..................$5,923.9*  $3,430.0  $3,155.9   
   Less ceded liabilities and deferred charges...   645.0*     573.9     597.9   
                                                 --------   --------  --------  
   Net balance................................... 5,278.9*   2,856.1   2,558.0   
                                                 --------   --------  --------  
  Incurred losses recorded:  
   Current accident year......................... 3,179.7      556.5     505.1   
   All prior accident years......................   (90.2)      55.5      60.2   
                                                 --------   --------  --------  
   Total incurred losses......................... 3,089.5      612.0     565.3   
                                                 --------   --------  --------  
  Payments with respect to:  
   Current accident year......................... 1,484.9       43.6      50.9   
   All prior accident years...................... 1,194.9      246.2     216.3   
                                                 --------   --------  --------  
   Total payments................................ 2,679.8      289.8     267.2   
                                                 --------   --------  --------  
  Unpaid losses and loss adjustment expenses:  
   Net balance at end of year.................... 5,688.6    3,178.3   2,856.1   
   Plus ceded liabilities and deferred charges...   585.8      520.3     573.9   
                                                 --------   --------  --------  
  Balance at end of year **......................$6,274.4   $3,698.6  $3,430.0   
                                                 ========   ========  ========  
  
    *  Includes GEICO balances as of the acquisition date.  
  
   **  Unpaid losses and loss adjustment expenses include liabilities   
       established with respect to retroactive reinsurance contracts that   
       provide for indemnification of insurance risk. These liabilities   
       aggregated $1,263.6, $1,283.5, and $1,296.0 at December 31, 1996,   
       1995 and 1994 respectively. Related deferred charges were established   
       with respect to these contracts and are reported as other assets.   
       Also included in unpaid losses and loss adjustment expenses are   
       discounted structured settlement reinsurance liabilities, which   
       totalled $217.2, $221.7, and $231.3 at December 31, 1996, 1995 and   
       1994 respectively.  
  
     Incurred losses "all prior accident years" reflects the amount of   
estimation error charged or credited to earnings in each year. In   
addition, this amount includes amortization of deferred charges re   
reinsurance assumed and accretion of discounted structured settlement   
liabilities. The use of estimates is inherent in the process of   
establishing unpaid losses and loss expenses. Additional information will   
be revealed over time and those estimates and assumptions will be revised   
resulting in gains or losses in the period made.  
  
(9)  Borrowings under investment agreements and other debt  
  
     Liabilities reflected for this balance  
      sheet caption are as follows (in millions):  
  
                                                  Dec. 31,   Dec. 31,    
                                                   1996       1995      
                                                 --------   --------  
     Borrowings under investment agreements..... $  865.3   $  878.9   
     1% Senior Exchangeable Notes Due 2001......    454.6       --     
     Other debt.................................    624.5      182.8   
                                                 --------   --------  
                                                 $1,944.4   $1,061.7   
                                                 ========   ========  
  
     Borrowings under investment agreements are made pursuant to contracts   
with terms generally ranging from three months to forty years and calling   
for interest payable, normally semiannually, at fixed rates ranging from   
3% to 9% per annum. The borrowings are senior unsecured debt obligations   
of the Company.  
  
     On December 2, 1996, Berkshire received net proceeds of $447.1   
million from the issuance of $500 million principal amount of 1% Senior   
Exchangeable Notes, due December 2, 2001 (the "Exchange Notes"). Under   
certain conditions, on the last trading day of January, April, July and   
October from January 1997 through July 2001, each $1,000 principal amount   
Exchange Note, is convertible at the option of the holder into 17.65   
shares of Salomon Inc common stock ("Salomon Stock"). Upon such   
conversion, Berkshire, at its option, may elect to redeem the Exchange   
Notes for an equivalent cash value of the Salomon Stock. Beginning on   
December 2, 1999, under certain conditions, the Exchange Notes are   
convertible into 17.65 shares of Salomon Stock at the option of the   
Company. Upon conversion, Berkshire may elect to redeem the Exchange   
Notes for an equivalent cash value of the Salomon Stock. In all other   
circumstances, Berkshire will pay the principal amount at maturity. At   
December 31, 1996, Berkshire subsidiaries owned common and preferred   
stock of Salomon possessing about 18% of the total voting power of that   
company.  
  
     No materially restrictive covenants are included in any of the   
various debt agreements. Payments of amounts outstanding at December 31,   
1996, are expected to be required no earlier than as follows (in   
millions):  
  
         1997     1998     1999     2000     2001     After 2001  
        ------   ------   ------   ------   ------    ----------  
        $130.8   $125.1   $ 54.3   $ 15.8   $474.0     $1,144.4  
  
(10)  Income taxes  
      The liability for income taxes as reflected in the accompanying   
Consolidated Balance Sheets represent estimates of liabilities as follows   
(in millions):  
                               Dec. 31,     Dec. 31,   
                                1996         1995    
                              --------     --------  
      Payable currently.......$  (41.1)    $   86.8   
      Deferred................ 6,878.7      4,762.7   
                              --------     --------  
                              $6,837.6     $4,849.5   
                              ========     ========  
  
      The Consolidated Statements of Earnings reflect charges for income   
taxes as shown below (in millions):  
  
                          1996        1995        1994     						 
	  
                        --------    --------    --------  
      Federal...........$1,169.9    $  252.3    $  138.1    
      State.............    26.1        22.6        22.1    
      Foreign...........     0.8         1.3         3.1    
                        --------    --------    --------  
                        $1,196.8    $  276.2    $  163.3    
                        ========    ========    ========  
  
      Current...........$  818.9    $  331.0    $  188.5    
      Deferred..........   377.9       (54.8)      (25.2)   
                        --------    --------    --------  
                        $1,196.8    $  276.2    $  163.3    
                        ========    ========    ========  
  
      The tax effects of temporary differences that give rise to   
significant portions of deferred tax assets and deferred tax liabilities   
at December 31, 1996 and 1995, are shown below (in millions):  
  
                                                            1996      1995      
                                                          --------  --------  
   Deferred tax liabilities:  
     Relating to unrealized appreciation of investments...$6,620.6  $4,908.5   
     Other................................................   860.9     157.0   
                                                          --------  --------  
                                                           7,481.5   5,065.5  
   Deferred tax assets....................................  (602.8)   (302.8)  
                                                          --------  --------  
   Net deferred tax liability.............................$6,878.7  $4,762.7  
                                                          ========  ========  
  
      Charges for income taxes are reconciled to hypothetical amounts   
computed at the federal statutory rate in the table shown below (in   
millions):  
  
                                                           1996       1995       1994      
                                                         --------   --------   --------  
   Net earnings before income taxes......................$3,705.9   $1,084.4   $  725.0   
                                                         ========   ========   ========  
   Hypothetical amounts applicable to above  
     computed at the federal statutory rate..............$1,297.1   $  379.5   $  253.8   
   Decreases, resulting from:  
     Tax-exempt interest income..........................   (41.7)     (10.6)     (14.6)  
     Dividends received deduction........................   (90.3)     (86.3)     (81.2)  
   Goodwill amortization.................................    21.6        5.7        4.8   
   State income taxes, less federal income tax benefit...    17.0       14.7       14.4   
   Other differences, net................................    (6.9)     (26.8)     (13.9)  
                                                         --------   --------   --------  
   Total income taxes....................................$1,196.8   $  276.2   $  163.3   
                                                         ========   ========   ========  
  
  
  
(11)  Shareholders' equity accounts  
      Changes in capital accounts of the Company during the two years ended   
December 31, 1996, are shown in the table below. Dollar amounts are in   
millions, except per share amounts.  
                                                                             Capital in    
                                        Class A Common    Class B Common    in Excess of   Class A Common  
                                         $5 Par Value    $0.1667 Par Value    Par Value     in Treasury      
                                     ------------------  -----------------  ------------  ----------------  
                                       Shares   Dollars   Shares   Dollars     Dollars    Shares   Dollars  
                                     ---------  -------  --------  -------  ------------  -------  -------  
Balance December 31, 1994 * .........1,381,308   $6.9       --        --      $  656.1    203,558   $37.6   
Common stock issued in connection  
  with acquisitions of businesses....                                            345.6    (15,762)   (2.9)  
                                     ---------  -------  --------  -------  ------------  -------  -------  
Balance December 31, 1995............1,381,308    6.9       --        --       1,001.7    187,796    34.7   
Common stock issued in connection  
  with acquisitions of businesses....                     112,655     --         707.5    (17,728)   (3.3)  
Common stock issued for cash.........                     517,500    $0.1        564.9    
Conversions of Class A Common Stock  
  to Class B Common Stock............(5,120)      --      153,600     --          	         
                                     ---------  -------  --------  -------  ------------  -------  -------  
Balance December 31, 1996............1,376,188   $6.9     783,755    $0.1     $2,274.1    170,068   $31.4   
                                     =========  =======  ========  =======  ============  =======  =======  
  
     * There were no changes in the Company's capital accounts during 1994.  
  
  
      On May 6, 1996, Berkshire shareholders approved a recapitalization   
plan which created a new class of common stock, designated as Class B   
Common Stock. In connection therewith, Berkshire's then existing common   
stock was redesignated as Class A Common Stock. Each share of Class A   
Common Stock is convertible, at the option of the holder, into thirty   
shares of Class B Common Stock. Class B Common Stock is not convertible   
into Class A Common Stock.  
  
      On May 8, 1996, Berkshire completed an initial public offering of   
517,500 shares of Class B Common Stock. Berkshire received net proceeds   
from the offering of $565.0 million. Since the Class B Common shares are   
equivalent to one-thirtieth (1/30) of the economic rights of Class A   
Common shares, the issuance of the Class B Common Stock was equivalent to   
the issuance of 17,250 Class A Common shares or approximately 1.4% of   
Class A Common shares outstanding at the time of the issuance of Class B   
Common shares.  
  
      Changes in unrealized appreciation of investments, net during the   
three years ended December 31, 1996 were as follows, in millions:  
  
                                                               Year ending December 31,  
                                                           --------------------------------  
                                                              1996        1995       1994    
                                                           ---------   ---------  ---------  
Balance at beginning of year...............................$ 9,220.7   $ 5,276.9  $ 4,318.6   
Increase in unrealized appreciation included in carrying  
  value of investments.....................................  4,604.0     6,177.1    1,486.5   
Increase in deemed applicable deferred income taxes........ (1,629.1)   (2,176.2)    (518.3)  
Increase in minority interest in unrealized appreciation...    (51.7)      (57.1)      (9.9)  
                                                           ---------   ---------  ---------  
Balance at end of year.....................................$12,143.9   $ 9,220.7  $ 5,276.9   
                                                           =========   =========  =========  
  
      Changes in retained earnings during the three years ended December   
31, 1996 were as follows, in millions:  
             
                                            Year ending December 31,          
                                            1996      1995      1994    
                                          --------  --------  --------  
          Balance at beginning of year....$6,544.1  $5,749.2  $5,196.2  
          Net earnings.................... 2,488.6     794.9     553.0  
                                          --------  --------  --------  
          Balance at end of year..........$9,032.7  $6,544.1  $5,749.2  
                                          ========  ========  ========  
  
(12)  Dividend restrictions - Insurance subsidiaries  
      Payments of dividends by Insurance Group members are restricted by   
insurance statutes and regulations. Without prior regulatory approval in   
1997, Berkshire can receive up to approximately $2.5 billion as dividends   
from insurance subsidiaries.  
  
      Combined shareholders' equity of insurance subsidiaries determined   
pursuant to statutory accounting rules (Statutory Surplus as Regards   
Policyholders) was approximately $26.1 billion at December 31, 1996. This   
amount exceeded by approximately $5.2 billion the corresponding amount   
determined on the basis of generally accepted accounting principles; the   
difference principally represents deferred income tax assets and   
liabilities and deferred charges re reinsurance assumed recognized for   
financial reporting purposes but not for statutory reporting purposes.  
  
(13)  Fair values of financial instruments  
      Statement of Financial Accounting Standards No. 107, "Disclosures   
about Fair Value of Financial Instruments" ("SFAS 107"), requires certain   
fair value disclosures. Fair value disclosures are required for most   
investment securities as well as other contractual assets and   
liabilities. Certain financial instruments, including insurance   
contracts, were excluded from SFAS 107 disclosure requirements due to   
perceived difficulties in measuring fair value. Accordingly, an   
estimation of fair value was not made with respect to unpaid losses and   
loss adjustment expenses.  
  
      In determining fair value, the Company used quoted market prices when   
available. For instruments where quoted market prices were not available,   
the Company used independent pricing services or appraisals by the   
Company's management. Those services and appraisals reflected the   
estimated present values utilizing current risk adjusted market rates of   
similar instruments.  
  
      Considerable judgement is necessarily required in interpreting market   
data to develop the estimates of fair value. Accordingly, the estimates   
presented herein are not necessarily indicative of the amounts the   
Company could realize in a current market exchange. The use of different   
market assumptions and/or estimation methodologies may have a material   
effect on the estimated fair value.  
  
      The carrying values of cash and cash equivalents, receivables and   
accounts payable, accruals and other liabilities are deemed to be   
reasonable estimates of their fair values. The estimated fair values of   
the Company's other financial instruments as of December 31, 1996 and   
1995, are as follows (in millions):  
  
                                       Carrying Value     Estimated Fair Value         
                                    --------------------  --------------------  
                                       1996       1995       1996       1995       
                                    ---------  ---------  ---------  ---------  
Investments in securities with        
   fixed maturities.................$ 6,446.9  $ 1,423.2  $ 6,446.9  $ 1,423.2   
Investments in equity securities.... 27,750.6   21,017.6   27,750.6   22,235.0   
Assets of finance businesses........    968.9      756.7      997.8      792.3   
Borrowings under investment   
   agreements and other debt........  1,944.4    1,061.7    1,937.9    1,095.0   
Liabilities of finance businesses...    851.4      685.2      852.0      704.4   
  
  
(14)  Quarterly data  
      A summary of revenues and earnings by quarter for each of the last   
two years is presented in the following table. This information is   
unaudited. Dollars are in millions, except per share amounts.  
  
                                                  1st        2nd        3rd        4th     		    
      1996                                      Quarter    Quarter    Quarter    Quarter    
                                               ---------  ---------  ---------  ---------  
Revenues.......................................$ 4,139.7  $ 1,914.8  $ 2,015.3  $ 2,430.5   
Earnings:  
  Excluding realized investment gain...........$   160.2  $   193.7  $   201.4  $   328.1   
  Realized investment gain (loss)..............  1,508.5*      (2.5)      62.6       36.6   
                                               ---------  ---------  ---------  ---------  
  Net earnings.................................$ 1,668.7  $   191.2  $   264.0  $   364.7   
                                               =========  =========  =========  =========  
Earnings per equivalent Class A common share:  
  Excluding realized investment gain...........$  134.23  $  160.91  $  166.34  $  270.52   
  Realized investment gain (loss).............. 1,263.92*     (2.08)     51.70      30.17   
                                               ---------  ---------  ---------  ---------  
  Net earnings.................................$1,398.15  $  158.83  $  218.04  $  300.69   
                                               =========  =========  =========  =========  
  
    * Includes $1.4 billion ($1,143.68/share), net of taxes, related to gain   
      arising from The Walt Disney Company's acquisition of Capital   
      Cities/ABC, Inc. See Notes 5 and 6.  
  
  
                                                  1st        2nd        3rd        4th     		    
      1995                                      Quarter    Quarter    Quarter    Quarter    
                                               ---------  ---------  ---------  ---------   
Revenues.......................................$   944.0  $ 1,018.4  $ 1,107.2  $ 1,493.7      
Earnings:  
  Excluding realized investment gain...........$   143.9  $   140.3  $   151.3  $   234.4      
  Realized investment gain (loss)..............     (4.7)      51.7       43.2       34.8      
                                               ---------  ---------  ---------  ---------  
  Net earnings.................................$   139.2  $   192.0  $   194.5  $   269.2      
                                               =========  =========  =========  =========  
Earnings per equivalent Class A common share:  
  Excluding realized investment gain...........$  122.22  $  118.54  $  126.78  $  196.56     
  Realized investment gain (loss)..............    (4.03)     43.71      36.18      29.16     
                                               ---------  ---------  ---------  ---------  
  Net earnings.................................$  118.19  $  162.25  $  162.96  $  225.72     
                                               =========  =========  =========  =========  
  
  
(15)  Business Segment Data  
      Berkshire identified seven business segments for purposes of 1996   
reporting pursuant to Statement of Financial Accounting Standards No.   
14. These include the property and casualty insurance business (The   
Insurance Segment) conducted on both a direct and reinsurance basis   
through a number of subsidiaries. Included in this segment is GEICO   
Corporation, the seventh largest auto insurer in the United States and   
National Indemnity Company, one of the world's leading providers of   
catastrophe excess of loss reinsurance. Berkshire's six separately   
conducted non-insurance business segments are as follows:  
  
   Business  
identity and headquarters      Segment                     Activity                                            
  
See's Candies                  Candy                       Manufacture and distribution at retail  
 South San Francisco, CA                                    and by catalog solicitation  
  
World Book                     Encyclopedias and           Publication and marketing,  
  Chicago, IL                   other reference materials   principally by the direct sales method  
  
Kirby, Douglas and  
 Cleveland Wood Divisions  
 of The Scott Fetzer Company   Home cleaning systems       Manufacture and sale principally to distributors  
 Cleveland, OH  
  
Nebraska Furniture Mart and    Home furnishings            Retailing  
 R.C. Willey Home Furnishings  
 Omaha, NE and Salt Lake  
 City, UT  
  
Buffalo News                   Newspaper                   Publication of a daily and Sunday newspaper  
 Buffalo, NY  
  
H. H. Brown Shoe Co.,  
 Lowell Shoe, Inc. and  
 Dexter Shoe Companies         Shoes                       Manufacture, importing and distribution at wholesale  
 Greenwich, CT, Hudson,                                     and retail  
 NH and Dexter, ME  
  
      The business segments identified above were responsible in 1996   
for 86% of Berkshire's consolidated revenues. Other businesses   
activities that contributed for 1996, in the aggregate, 11% of   
Berkshire's consolidated revenues, were as follows:  
  
Business identity              Product/Service/Activity                                                                
  
Adalet - PLM                   Explosion proof electrical enclosures, cable couplers and terminations  
BHR                            Real estate management  
Berkshire Hathaway  
 Credit Corporation            Commercial financing  
Berkshire Hathaway Life  
 Insurance Co.                 Annuities  
Blue Chip Stamps               Marketing motivational services  
Borsheim's                     Retailing fine jewelry  
Campbell Hausfeld              Air compressors, air tools, painting systems, pressure washers, welders and generators  
Carefree                       Comfort and convenience products for the recreational vehicle industry  
Fechheimer Bros. Co.           Uniforms and accessories  
FlightSafety International     High technology training to operators of aircraft and ships  
France                         Appliance controls; ignition and sign transformers  
Halex                          Zinc die cast conduit fittings and other electrical construction materials  
Helzberg's Diamond Shops       Retailing fine jewelry  
Meriam                         Pressure and flow measurement devices  
Northland                      Fractional horsepower electric motors  
Powerwinch                     Marine and general purpose winches, windlasses, and hoists  
Precision Steel Products       Steel service center  
Quikut                         Cutlery for home and sporting goods markets  
ScottCare                      Cardiopulmonary rehabilitation and monitoring equipment  
Scott Fetzer Financial Group   Commercial and consumer finance companies  
Scot Labs                      Cleaning and maintenance chemicals  
Stahl                          Custom service bodies, flatbed bodies, cranes and tool boxes for trucks  
Wayne                          Furnace burners; sump, utility and sewage pumps  
Wesco Financial                Real estate management  
Western Enterprises            Medical and industrial compressed gas fittings and regulators  
Western Plastics               Molded plastic components  
  
  
      A disaggregation of Berkshire's consolidated data for each of the   
three most recent years is presented in the tables which follow on   
this and the following page. Amounts are in millions.  
  
                                              Revenues              Operating profit before taxes  
                                  -------------------------------  -------------------------------  
                                     1996       1995       1994       1996       1995       1994     
                                  ---------  ---------  ---------  ---------  ---------  ---------  
Identified Segments:  
  Insurance.......................$ 7,133.1  $ 1,715.7  $ 1,499.8  $ 3,189.6  $   776.5  $   702.0   
  Non-insurance businesses........  1,922.9    1,775.1    1,620.7      267.2      233.2      261.9   
                                  ---------  ---------  ---------  ---------  ---------  ---------  
                                    9,056.0    3,490.8    3,120.5    3,456.8    1,009.7      963.9   
  
Other than identified segments....  1,444.3    1,072.5      789.8      342.1      130.7     (178.8)**  
  
Interest expense *................                                     (93.0)     (56.0)     (60.1)  
                                  ---------  ---------  ---------  ---------  ---------  ---------                                                 
   Aggregate consolidated total...$10,500.3  $ 4,563.3  $ 3,910.3  $ 3,705.9  $ 1,084.4  $   725.0   
                                  =========  =========  =========  =========  =========  =========  
  
   *  Amounts of interest expense represent those for borrowings under   
      investment agreements and other debt exclusive of that of finance   
      businesses and interest allocated to certain identified segments.  
  
  **  Includes pre-tax charge of $268.5 million representing an other-  
      than-temporary decline in value of investment in USAir Group, Inc.   
      Preferred Stock.  

Insurance Segment                       Revenues              Operating profit before taxes  
                                  -------------------------------  -------------------------------  
                                     1996       1995       1994       1996       1995       1994     
                                  ---------  ---------  ---------  ---------  ---------  ---------  
Premiums earned: *  
  Direct..........................$ 3,432.9  $   287.3  $   281.1   
  Reinsurance assumed.............    764.0      718.4      688.5   
  Reinsurance ceded...............    (79.1)     (48.2)     (46.4)  
                                  ---------  ---------  ---------  ---------  ---------  ---------  
                                    4,117.8      957.5      923.2   
  
Underwriting......................                                 $   230.7  $    19.6  $   129.0  
Goodwill amortization.............                                     (42.6)      --         --    
Investment income.................    725.9      577.1      484.6      712.1      575.8      481.0  
Realized investment gain..........  2,289.4      181.1       92.0    2,289.4      181.1       92.0  
                                  ---------  ---------  ---------  ---------  ---------  ---------  
                                  $ 7,133.1  $ 1,715.7  $ 1,499.8  $ 3,189.6  $   776.5  $   702.0  
                                  =========  =========  =========  =========  =========  =========  
  
  
  * Premiums written were as follows:  
  
                               1996        1995        1994     
     Direct..................$3,465.4    $  294.8    $  271.2   
     Reinsurance assumed.....   722.7       777.9       689.9   
     Reinsurance ceded.......   (82.9)      (48.5)      (45.6)  
                             --------    --------    --------  
                             $4,105.2    $1,024.2    $  915.5   
                             ========    ========    ========  
  
  
  
  
Non-Insurance Business Segments           Revenues           Operating profit before taxes  
                                    -------------------------------  -------------------------------  
                                       1996       1995       1994       1996       1995       1994     
                                    ---------  ---------  ---------  ---------  ---------  ---------  
  
Candy...............................$   248.9  $   233.6  $   216.1  $    50.9  $    49.3  $    46.6   
Encyclopedias,   
  other reference material..........    119.0      157.9      191.3       10.3        7.4       24.4   
Home cleaning systems...............    253.7      235.6      207.6       62.5       52.6       43.9   
Home furnishings....................    586.6      428.1      245.4       41.0       28.1       16.9   
Newspaper...........................    154.2      154.8      150.9       49.8       46.3       53.7   
Shoes...............................    560.5      565.1      609.4       52.7       49.5       76.4   
                                    ---------  ---------  ---------  ---------  ---------  ---------  
                                    $ 1,922.9  $ 1,775.1  $ 1,620.7  $   267.2  $   233.2  $   261.9   
                                    =========  =========  =========  =========  =========  =========  
  
  
  
  
  
  
  
Other Than Identified Segments             Revenues           Operating profit before taxes  
                                     -------------------------------  -------------------------------  
                                        1996       1995       1994       1996       1995       1994     
                                     ---------  ---------  ---------  ---------  ---------  ---------  
  
Other businesses.....................$ 1,195.6  $ 1,021.7  $   758.5  $   108.5  $    93.8  $    72.7    
Not identified with   
  specific businesses:  
  Interest and dividend income.......     54.0       37.8       32.0       54.0       37.8       32.0    
  Realized investment gain (loss)....    194.7       13.0       (0.7)     194.7       13.0       (0.7)   
  All other except interest expense..                                     (15.1)     (13.9)    (282.8)*  
                                     ---------  ---------  ---------  ---------  ---------  ---------  
                                     $ 1,444.3  $ 1,072.5  $   789.8  $   342.1  $   130.7  $  (178.8)   
                                     =========  =========  =========  =========  =========  =========  
  
      * Includes pre-tax charge of $268.5 million representing an other-  
        than-temporary decline in value of investment in USAir Group, Inc.   
        Preferred Stock.  
  
                                                         Deprec. & amort.  
                              Capital expenditures *    of tangible assets        
                               1996    1995    1994    1996    1995    1994    
                              ------  ------  ------  ------  ------  ------  
Insurance.....................$ 12.2  $  1.2  $  0.9  $ 26.3  $  0.9  $  0.9  
Candy.........................   5.3     5.1     4.1     4.5     4.1     4.1  
Encyclopedias, and  
  other reference material....  --      --       0.1     0.4     1.0     1.4  
Home cleaning systems.........   2.0     0.3     1.0     2.7     3.0     4.2  
Home furnishings..............  21.6     9.2    22.6    10.0     9.7     6.2  
Newspaper.....................   1.0     1.8     5.2     2.8     4.9     2.2  
Shoes.........................  12.8    13.7    17.9    13.4    12.0    10.2  
Other.........................  26.9    22.9    15.3    27.6    24.7    20.4  
                              ------  ------  ------  ------  ------  ------  
                              $ 81.8  $ 54.2  $ 67.1  $ 87.7  $ 60.3  $ 49.6  
                              ======  ======  ======  ======  ======  ======  
  
           *  Excludes expenditures which were part of business acquisitions.  
  
                                                Identifiable assets                  
                                                    at year-end                      
                                             1996       1995       1994        
Insurance.................................$36,597.8  $25,280.0  $17,765.6  
Candy.....................................     74.1       74.5       69.4  
Encyclopedias, other reference material...     69.8       71.8       75.9  
Home cleaning systems.....................     44.3       42.9       42.1  
Home furnishings..........................    445.8      427.7      128.4  
Newspaper.................................     42.0       45.0       48.4  
Shoes.....................................    624.4      656.7      672.7  
Other.....................................  5,511.3    2,112.8    1,807.1  
                                          $43,409.5  $28,711.4  $20,609.6  
                                          =========  =========  =========  
  
(16)  Supplemental cash flow information  
      A summary of supplemental cash flow information is presented in   
the following table (in millions):  
  
                                                   1996      1995      1994      
   Cash paid during the year for:  
     Income taxes................................$  965.9  $  294.6  $  411.1   
     Interest....................................   129.4      83.9      90.6   
   Non-cash investing and financing activities:  
     Liabilities assumed in connection 		  
       with acquisitions of businesses........... 4,172.1     248.0      --     
     Common shares issued in connection  
       with acquisitions of businesses...........   710.8     348.5      --     
     Fair value of investments acquired  
       as part of exchanges and conversions...... 1,618.6      --        --     
  
   
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